401. If a company purchased treasury stock with cash, this would be reported on the statement of cash flows as?
(a) An operating cash outflow
(b) An investing cash outflow
(c) A financing cash outflow
(d) A financing cash inflow
402. When equipment is sold for cash, the amount received is reflected as cash?
A. Inflow in the operating section
B. Inflow in the financing section
C. Inflow in the investing section
D. Outflow in the operating section
403. Which of the following is not an example of cash equivalents?
A. Certificates of Deposit
B. Money market accounts
C. Money market mutual funds
D. Euro Bond
404. Which of the following cash flows results from an operating activity?
A. Paying dividends to stockholders
B. Repaying note payable
C. Receiving interest on investment
D. Purchasing equipment
405. Which of the following cash flows results from a financing activity?
A. Receiving dividends on investment in another company
B. Repaying long-term debt
C. Purchasing an investment in another company
D. Receiving payment from a customer
406. Which of the following cash flows results from a financing activity?
A. Borrowing money from the bank
B. Receiving a stock dividend worth Rs. 3 per share
C. Paying income taxes at end of year
D. All of the above result from financing activities
407. The two approaches to reporting cash flows provided by operating activities are?
A. Direct and indirect methods
B. The basic and standard methods
C. The gross margin and contribution margin methods
D. The liquidity and profitability methods
408. In preparing cash flows provided by operating activities using the indirect method, which of the following items is added to net income?
A. Non-cash expenses such as depreciation
B. Gains on investing and financing transactions
C. Increases in current asset balances
D. Decreases in current liability balances
409. Which of the following would be considered an investing activity and a source of cash?
A. Purchase of equipment
B. Sale of BBB’s stock held as an investment
C. Issuance of corporate stock
D. Receipt of interest on savings account
410. Which of the following is not a deferred revenue expenditure?
A. Expenses in connection with issue of equity shares
B. Preoperative expenses
C. Heavy advertising expenses to introduce a new product
D. Legal expenses incurred in defending a suit for breach of contract to supply goods
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